Daybreak - How much breathing room does your power supply actually have?

Episode Date: October 1, 2026

This September was supposed to give India's power grid a break. Instead, on some nights, the gap between the electricity people wanted and what the grid could supply reached almost 8 gigawatts, bigger than anything seen during this year's heatwaves. Kerala restricted power in the evenings. Near Patna, villagers blocked a highway after three days without electricity. And 82 power plants were running critically low on coal, with barely a week's worth left.Strangely, India isn't short of coal. About 76 million tonnes sits at Coal India's mines. But a weak monsoon drained the dams and flooded the coal belt at the same time.So how much breathing room is there between you and a power cut? This episode was edited by Arnav Prakash.Daybreak is produced from the newsroom of The Ken, India’s first subscriber-only business news platform. Subscribe for more exclusive, deeply-reported, and analytical business stories.

India's power demand has been unusually high this September. On some nights, the gap between the electricity that people wanted and what the grid could supply reached almost 8 gigawatts. That's bigger than the shortfall that we experienced during the worst of this year's summer. Interestingly, just five months ago, India's power ministry was celebrating a record. On the 25th of April, the country met 256 gigawatts of peak electricity demand without a shortage. By May 21st, during a heat wave, the grid was meeting nearly 271 gigawatts. Both the records were set in the afternoon when solar was at full strength, by the way.

The message from the government was fairly straightforward then. India had built enough generation capacity to handle even very high demand. But then came September. Kerala was among the states that felt it the sharpest. Evening demand in the state repeatedly It repeatedly crossed 5,000 megawatts and at times only about 4,200 megawatts was available according to reports. The state electricity board restricted power in the evenings and at night. It says that it could not buy its way out because often there was not enough power in the market to buy. In Behar, up north, hundreds of villagers blocked a highway after going without electricity for three days. These shortages have eased over the last week or so as rain cool things down.

But they have exposed a problem India has seen before and hoped not to see again. Its power plants are running short of coal. By 27th of September, 82 thermal power plants had critically low stocks, meaning less than a quarter of what they are supposed to hold. Across the country, plants had roughly seven days of coal. In August last year, they held 50 million tons, and now it is under 22. The government is clearly worried. Last Friday, the power ministry invoked Section 11 of the Electricity Act

and ordered about 112 captive coal-fired power plants to operate at maximum available capacity from 1st of October through the 31st of December. All this in a country that has spent years building up its power supply. India added a record number of generating capacity last financial year and also its solar power is growing fast. So how did we still end up here? Welcome to Daybreak, a business podcast from the Ken. I'm your host, Nick Dha Sharma, and I don't chase the news cycle.

Instead, every day of the week, my colleague Rachel Vargheese and I will come to you with one business story that's worth understanding and worth your time. Today is Thursday, the 1st of October. A part of the answer is the weather. A strong El Nino has left this year's monsoon about 12% before normal. If that holds, it will be the weakest monsoon since 2015. That hit the power system twice. The dry weather pushed demand up, more ACs were running in the heat and farmers were relying more

on pumps to make up for the rain that never came. At the same time, there was less water in the dams. Hydro power output fell 12% in September. And hydro is particularly useful in the evening when the sun sets and solar generation fades. So more of that evening load landed on the thermal power plants. And then came the twist. While the dams were short of water, it was also really. raining heavily in India's coal belt. Downpours in Chattisgarh, Odisha and Jharkand flooded mines and disrupted transport. The same monsoon was too dry for the dams and too wet for the mines. Coal India was also digging less coal than it did a year ago. Between April and August, its production fell 4.5%. In August alone, it fell 5.7% to 47.5 million tons. But it sent out

60.6 million tons, which is 5.5% more than a year earlier. And here's the catch. It made up for this difference by drawing down on the stockpile that it had built at the mines. So, there was coal at coal India's mines, about 76 million tons, but it just wasn't getting to the power plants fast enough, which is where September's power crunch gets even more interesting. Because the real question is, how much slack does India's electricity system actually have when many things go wrong at the same time. On Monday, India's coal minister said that there was no shortage of coal. The problems caused by the monsoon, he said, had now normalized. But the same day, government data showed that the number of thermal power plants with critically low stocks had risen again.

Now, here is the thing. Both of these things can be true, because they are describing different points in the supply chain. You see, India is not designed to keep months of coal sitting beside every power plant. The system relies on a continuous flow from mines to generators with each plant required to maintain a certain number of days of stock. In September, that requirement is 12 days for plants which are next to the mines and 20 days for plants which are further away. The requirement rises after the monsoon.

So the system enters September with a relatively lean inventory. This year too, it entered the month with demand running high and coal consumption accelerating. Upstream, the pile at the mines, meanwhile, had been shrinking. Coal stocks there peaked at about 157 million tonnes in early March. Some of the fall since is simply a return towards normal levels. But coal India has also been drawing it down deliberately, aiming for around 50 million tons. And then there's also the journey. Between April and August, coal loading rose about 5.5.

and coal received at power plants rose to about 3% even as consumption surge. And it isn't just the trains. In a central electricity authority report from mid-September, 56 of the 72 plants flagged as critical was short because of lower than required supplies from coal companies. The same report shows plants at the mines holding about 55% of their required stock and plants further away about 35% only. So, the mines were producing less, the stockpile was being drawn down and rain was making it harder to mine and move coal.

Naturally, the plants furthest from the mines were left with the thinnest cushion. So, a seven days of coal buffer. How worried should we be then? More on this in the next segment. See, seven days is low, but India has seen lower. In October 2021, power plants had an average of about four days of coal. At one point, around 11 gigawatts of thermal capacity was affected by shortages. In October 2023, stocks fell to roughly 7 and a half days.

So, 7 days does not mean a countdown to the lights going out. Coal is a rolling stock, like I explained earlier. Thermal plants receive fresh supplies every day and inventories can change quickly. The more immediate sign of pressure, though, is the price of electricity. When a discorm needs more power than its content, then it can buy the difference in the exchanges. In the first 17 days of September, the average day-ahead market price was about $7.83 a unit, which is more than twice of what it was during the same period last year. In the high-price segment, prices repeatedly hit the $20 ceiling,

mostly during non-solar hours. But again, I don't mean your electricity bill will automatically double. What I'm saying is eventually high power purchase costs can be passed through to consumers through the various fuel and power purchase adjustments that states allow. And the government is already trying to build more supply into the system for the coming months. Like I told you earlier, on the 25th of this month, the government invoked Section 11 of the Electricity Act. It directed more than 100 captive coal plants to run at maximum available capacity from October 3,000. through December and any surplus power to be sold through to the exchanges. Tata powers 4 gigawatt Mundra plant in Gujarat has received a similar direction.

The government is also considering making thermal plants blend up to 5% of imported coal with domestic coal. That proposal is still at the discussion stage though. These measures buy the system some breathing room. But they also point to the issue underneath this whole episode, which is how much breathing room does India's power system actually have? Daybreak is produced from the newsroom of the Ken, India's first subscriber-focused business news platform. What you're listening to is just a small sample of a subscriber-only offerings and a full subscription unlocks daily long-form feature stories, newsletters and podcasts.

Head to the Ken.com and click on the red subscribe button on the top of the website. Today's episode was hosted and produced by Snikta Sharma and edited by Arna Grakash. Thank you.